Report: China’s strong crude oil imports reflect a deceptive recovery of the economy

China’s imports of most major commodities rebounded in August, but the strength of imports of crude oil, iron ore and coal, is likely to be related to temporary factors, not a sign of a real recovery of the world’s second largest economy.

Crude oil imports rose to 12.43 million barrels per day in August, the third highest daily rate, with an increase of 20.9% from July, and imports for the first eight months of the year increased by 14.7% compared to the same period in 2022, after China ended restrictions aimed at preventing the spread of coronavirus, according to data released by the General Administration of Customs.

There are many reasons that push China’s oil imports to rise, as the recovery of domestic travel has led to an increase in demand for gasoline and jet fuel, and China has been building inventories throughout most of the year, adding about 950 thousand barrels per day to storage tanks in the first six months of the year.

Refiners reversed this trend in July, withdrawing from inventories by about 510 thousand barrels per day, processing more crude than was available from imports and domestic production.